Buy AMD on this dip because its new products will take share from Nvidia, Intel, analyst says

Investors should buy Advanced Micro Devices shares because the company's earnings this year will come in significantly above expectations, according to Canaccord Genuity, which reiterated its buy rating on the chipmaker.

AMD shares are up 485 percent in the past 12 months through Wednesday on anticipation of its new gaming graphics and processor chips. However, the stock is down 12 percent since the company launched its Ryzen processors last week due to concerns over the product's gaming performance.

After hosting company management meetings with investors the last three weeks "we leave more confident in our positive thesis, despite the recent stock appreciation and volatility," analyst Matthew Ramsay wrote in a note to clients Thursday. "Modest growth assumptions across a $50B+ TAM [total addressable market] from very low CPU/GPU share levels today drive our estimates materially above consensus, as much skepticism still remains. While we recognize roadmap execution and competitive risks remain, we believe risk/reward is still tilted toward the upside."

AMD CEO Lisa Su told CNBC on Friday that the company will issue software patches for older titles, which "in a matter of weeks and months, we'll get significant improvements" in gaming performance.